Pound Dollar Chart 6 oCT 2009

Pound Dollar Chart 6 oCT 2009

The pounds to dollars pair continues to find traction in the 1.59 price region, and once again yesterday managed to hold this price level having first attempted to break back into the 1.60 region above, a price the market failed to hold and as a result the candle closed with a deep upper wick suggesting the pair are trading with a bearish tone. Indeed this view is confirmed by last week’s shooting star, which found resistance from the 9 day moving average, not a good signal for Sterling bulls, and we saw much the same price action in yesterday’s trading with the pair struggling to break above the 14 day moving average, and eventually failing. They say that the market has no memory, but Governor King’s comments I believe are still weighing heavily on the UK pound which may struggle to regain any positive impetus in the short term. With all three moving averages pointing firmly lower we should expect to see a break down to the 1.55 price region in due course, and possibly even as far as 1.52 where strong support awaits.  With hardly any fundamental news on the economic calendar for cable other than the BRC Shop Price Index in the UK & crude oil inventories and outstanding consumer credit numbers in the US we can expect the price action in this pair to be somewhat muted. In addition the market with the market also waiting for tomorrow’s interest rate decision in the UK it may best to stay out of the pair altogether.